In this paper, a modelling method is described for production chains including recycling. It consists of elementary models of standard production operations, connected by market modules. The models are analysed using methods from control theory. These methods allow us to investigate essential properties of the chain concerning its dynamical behaviour, particularly with respect to stability and controllability. These properties are prerequisites for effective chain management, as in the evaluation of recycling policy. A case study on paper recycling was carried out to demonstrate the applicability of this method to practice.